Becoming an Investor With Spread Betting: Learning By Doing

If you want to learn just about anything it all, there’s a time to research and study, but the real learning comes from getting your hands dirty. There are many mechanics at work when we learn by doing. We’re remembering things we’ve learned in the past. We’re putting these theoretical notions into practice. We’re getting used to the sensation of actually doing a thing. We’re using real time trial and error to figure out what works and what doesn’t. We’re developing our own styles and strategies.

Nowhere is this more important than in the world of investment. Investing requires all of the actions already described, but it adds to the pile one important element: money. When you invest, you are risking your own money. This money may represent your livelihood, your future goals, or an important gift entrusted to you by someone else. In any case, you don’t want to lose that money. You want to make it grow instead, which adds a level or urgency and purpose to the learning experience. Investors become better investors by investing.

This may be true, but not everyone has the startup capital that they can risk on early trading situations. We may learn from our mistakes in investing (and boy, do we learn them), but an early loss could take a new investor out of the game forever, because they have no money to make grow any longer.

That’s why new investors are better served by finding affordable ways to develop their skills, within sinking most of their money on one or two stocks that may or may not work out. One of the best possible ways to do exactly this is to try spread betting, a non-ownership model of investment for people who want to learn great skills without risking tons of money. ETX Capital is the best place to start, as they let users try various investments without risking money. There won’t be profits in this kind of demo account, but there won’t be losses either. Here’s some more information about how this works in general.

How Spread Betting Requires Less Investment Money to Start

Traditional investing of stocks and bonds gives people the opportunity to actually own a small piece of the business or financial product involved. So if the company you bought goes up in value, your stock increases in value by the same proportion. This is great for people who own large positions in great companies, but this is only possible for people who are already wealthy, or who have already developed their portfolios by leaps and bounds over many years.

Spread betting doesn’t require the user to own anything. Instead, the user will make value speculations (educated guesses, really) about how different financial entities (stocks, bonds, markets, commodities, Forex, etc.) will change in value over time. The investor locks in a specific amount of money that will remain in play for a specific amount of time. When the time expires, the price is checked. If the investor predicted that the price would rise when time was called, and the price actually did so, the investor will receive returns proportionate to the amount of money invested.

There is tremendous leverage in spread betting. With practice, users can start to learn the global factors which determine the instantaneous price fluctuations in equities, currencies, and goods. These are the same skills that make traditional investors great at what they do, meaning that as you progress, you’ll develop all the skills you need to move into traditional equity investing. If you’re successful at spread betting, you should be able to develop a purse that’s more than enough to get you started.